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Alcoa Executive Vice President Olivier Jarrault to Present at Cowen and Company 34th Annual Aerospace/Defense Conference
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Alcoa Executive Vice President Olivier Jarrault to Present at Cowen and Company 34th Annual Aerospace/Defense Conference


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Alcoa Executive Vice President Olivier Jarrault to Present at Cowen and Company 34th Annual Aerospace/Defense Conference …

Alcoa Executive Vice President Olivier Jarrault to Present at Cowen and Company 34th Annual Aerospace/Defense Conference

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  • 1. Alcoa. Advancing each generation.Olivier JarraultEVP and Group President – Engineered Products and SolutionsCowen and Company’s 34th Annual Aerospace/Defense ConferenceFebruary 6-7, 2013
  • 2. Cautionary StatementForward-Looking StatementsThis presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements.Forward-looking statements include those containing such words as “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “outlook,”“plans,” “projects,” “should,” “targets,” “will,” or other words of similar meaning. All statements that reflect Alcoa’s expectations,assumptions, or projections about the future other than statements of historical fact are forward-looking statements, including, withoutlimitation, forecasts concerning global demand growth for aluminum, end-market conditions, supply/demand balances, and growthopportunities for aluminum in automotive, aerospace and other applications, trend projections, targeted financial results or operatingperformance, and statements about Alcoa’s strategies, outlook, and business and financial prospects. Forward-looking statements aresubject to a number of known and unknown risks, uncertainties, and other factors and are not guarantees of future performance.Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) materialadverse changes in aluminum industry conditions, including global supply and demand conditions and fluctuations in London MetalExchange-based prices for primary aluminum, alumina, and other products, and fluctuations in indexed-based and spot prices foralumina; (b) deterioration in global economic and financial market conditions generally; (c) unfavorable changes in the markets served byAlcoa, including automotive and commercial transportation, aerospace, building and construction, distribution, packaging, defense, andindustrial gas turbine; (d) the impact of changes in foreign currency exchange rates on costs and results, particularly the Australian dollar,Brazilian real, Canadian dollar, euro, and Norwegian kroner; (e) increases in energy costs, including electricity, natural gas, and fuel oil,or the unavailability or interruption of energy supplies; (f) increases in the costs of other raw materials, including calcined petroleum coke,caustic soda, and liquid pitch; (g) Alcoa’s inability to achieve the level of revenue growth, cash generation, cost savings, improvement inprofitability and margins, fiscal discipline, or strengthening of competitiveness and operations (including moving its alumina refining andaluminum smelting businesses down on the industry cost curves and increasing revenues in its Global Rolled Products and EngineeredProducts and Solutions segments) anticipated from its restructuring programs and productivity improvement, cash sustainability, andother initiatives; (h) Alcoas inability to realize expected benefits, in each case as planned and by targeted completion dates, from sales ofnon-core assets, or from newly constructed, expanded, or acquired facilities, such as the upstream operations in Brazil and theinvestments in hydropower projects in Brazil, or from international joint ventures, including the joint venture in Saudi Arabia; (i) political,economic, and regulatory risks in the countries in which Alcoa operates or sells products, including unfavorable changes in laws andgovernmental policies, civil unrest, or other events beyond Alcoa’s control; (j) the outcome of contingencies, including legal proceedings,government investigations, and environmental remediation; (k) the business or financial condition of key customers, suppliers, andbusiness partners; (l) adverse changes in tax rates or benefits; (m) adverse changes in discount rates or investment returns on pensionassets; (n) the impact of cyber attacks and potential information technology or data security breaches; and (o) the other risk factorssummarized in Alcoas Form 10-K for the year ended December 31, 2011, Forms 10-Q for the quarters ended March 31, 2012, June 30,2012 and September 30, 2012, and other reports filed with the Securities and Exchange Commission. 2
  • 3. Alcoa Aerospace: An Innovative Products and Solutions Leader Diverse portfolio of innovative products and solutions with leading industry positions across many product lines Positioned to capture share growth now and in the future Underpinned by the Alcoa Advantage and a rich aerospace history  Delivering significant value to our customers by enabling current and next generation aircraft Alcoa. Advancing each generation. 3
  • 4. Alcoa Aerospace: Global Presence with 50 Facilities in 12 Countries Laval, Quebec Georgetown, Ontario Leicester, UK Redditch, UK Aichach, Germany Kitts Green, UK Kelkheim, Germany Exeter, UK Hildersheim, Germany Massena, NY Hannover, Germany Dover, NJ Cergy, France Montbrison, France Belaya Kalitva, Russia Winsted, CT St. Cosme-en-Vairais, France Samara, Russia Torrance, CA Branford, CT Toulouse, France Carson, CA Cleveland, OH Us, France City of Industry, CA Whitehall, MI Halethorpe, MD Dives, France Changwon, Korea Fullerton 1 & 2, CA Davenport, IA Evron, FranceNewbury Park 1 & 2, CA Morristown, TN Hampton, VA Gennevilliers, France Nomi, Japan Simi Valley, CA Sylmar, CA Casablanca, Morocco Székesfehévár, Hungary Nemesvámos, Hungary Chandler, AZ Lafayette, IN Tucson, AZ La Porte, IN Suzhou, China Waigaoqiao, China Wichita Falls, TX Acuña, Mexico Excludes sales and business offices 4
  • 5. Two Alcoa Business Groups Power Alcoa AerospaceAlcoa Corporate 2012 Revenues: $23.7 Billon | Locations: 200 +, in 30 Countries | Employees: 61,000 Global Rolled Engineered Products Products and Solutions 2012 Revenues $7.4 B 2012 Revenues $5.5 B Aero 16% Other market sectors % GRP 2012 % EPS 2012 84% Aerospace 14% Aerospace Revenue 50% Revenue 5
  • 6. A Balanced Aerospace Portfolio Producing $3.8B in Revenues* Global Leader in Advanced Aerospace Solutions  Aluminum sheet and plateInnovative Fastening  Commercial and military aircraftSolutions aluminum forgings and extrusions Global leader in aerospace Aero Structures  Structural castings fastening systems Fastening 45% Systems $1.7B 29% $1.1B Precision Castings 26% $1.0B High Performance Engine Castings  Global leader in jet engine airfoils* 2012 Revenues 6
  • 7. Vibrant Aerospace Growth Projected Over Long and Near Term Strong Orders and Deliveries… …Driven by Travel Demand + Aging Fleet Commercial Jet Deliveries1 Commercial Airline Fleet2 (thousand units) Units 4.1% CAGR 1,830 Avg. build rate $B Value $240 of 1,700 aircraft 3.6% per year 1,520 34,000 1, 600 1,500 CAGR 1,440 new planes $190 8.5% CAGR $166 1,152 1,164 16,100 1, 200 Growth $135 planes $140 20 $118 $102 9 800 $90 $72 $64 7 Replacement 14 400 Backlog: ~8 years of $40 20 production at 13 2012 rates 6 Existing fleet 0 - $10 2009 2011 2013 2015 2017 2019 2011 2021 2031Sources: 1) The Airline Monitor and OEM websites 2) Boeing 2012 Commercial Market OutlookNotes: All figures include both Large Commercial Aircraft & Regional Jets 7
  • 8. Alcoa Aerospace Thrives on Both CFRP and Metal-Intensive Aircraft Alcoa Aerospace Has Strong Positions on Every Large Transport AircraftValue Per-Ship Set Not Diminished on CFRP- Embedded in Every Type of Aircraft Intensive Aircraft Alcoa Revenue per Aircraft Model Indexed to the B737 747-8 777  3x the ship-set value on 787 vs. 737 787  Over 80% higher on 787 vs. 767 767 737 Family =100 A380 A350  Over 85% higher on A350 vs. A330  ~ 60% of Alcoa Aerospace’s A330 revenues are generated by productsA320 Family made from materials other than aluminum 8
  • 9. Alcoa Technology: Unsurpassed Innovation Capabilities Alcoa Technology Advantage: Differentiates Alcoa From Our Competitors Top R&D Capabilities Alcoa Technical Core Competencies Surface Pilot Coatings Production Alcoa Technical Center, PA, USA Design Basic World’s Largest Light Metals Research Science Modeling Facility Alloy Development Received top ranking in innovation as Fortune Magazine’s Most Admired Casting Forming Metals Company in the World for 2012 Joining More than 90% of all alloys flying on today’s aircraft were developed by Alcoa 9
  • 10. Alcoa Has Invented the Majority of Aerospace Aluminum AlloysChronology of Alcoa Aerospace Alloy Advancement Why Alcoa’s Al-Li? = Al-Li Products Thick  Lower cost base Product through the limited use of silver as an Upper alloying agent Wing  Industry’s most Fuselage complete product portfolio including sheet, plate, small press extrusions, Lower large press Wing extrusions and forgings Space & Military  World - leading round ingot capability 10
  • 11. Alcoa Technology: From Nose to Tail and Across the Wingspan 11
  • 12. 3rd Generation Aluminum Lithium Alloys for Next-Generation Aircraft 20% Fuel Selected Alcoa Al-Li Applications New Al-Li Alloys for Propulsion Efficiency A380: Lower Wing Stringers,Improvement Floor Beams, Seat Tracks 2055 Extrusions 2060 Forgingsttttttttttttttttttt and Misc Small Press 2-5% Wingttttttttttttttttttt Extrusions aerodynamicttttttttttttttttttt dragttttttttttttttttttt reduction A350-XWB: Floor Beamstttttttttttttttttttttttttttttttttttttt 3% Weight tt reduction Global 7000 / 8000: Lower Wing Stringers 15% Engine fuel burn Expanding to Meet Customer Demand High strength; meet reduction high temperature demands 30%Maintenance  Best combination of lower density cost (4% to 6%), improved stiffness (5% to 7%) reduction  Investing ~$90M in new state-of-the art and corrosion resistance; reduces facility in Lafayette, IN Fuel burn ~15% 10% Assembly  More than 20k metric tons from greenfield project Maintenance cost cost reduction  Expanding UK capacity as well Noise 12
  • 13. Advanced Airfoils Increase Next Generation Turbine Efficiencies Next Generation Jet Engine Needs Next Generation Jet Engine Needs Alcoa Innovative Solutions Fuel Burn ~15% Reduction Advanced Single Crystal:  Increased Melting Point 12% Emissions ~50% NOx Reduction  Oxidation Resistance Improvement +30% Improved Maintenance Cycle Thin Airfoil Equiax Process: ~15 Decibel Noise Reduction  Reduced Blade Weight ~ -20%  Improved Fuel Consumption Alcoa Innovative Solutions Multi-Wall / 3D Airfoil Cooling Schemes Aerospace Applications  Directs Air to Critical Areas Next Generation:  Large Commercial Aircraft  Military 13
  • 14. Innovative Fasteners Solve Commercial Aerospace Challenges Next Generation Sleeved Advanced Quick-Access 20% Fuel Fastening Systems Fastening Devices EfficiencyImprovement FC43® Titanium Panel Fastener Flite-Tite® 2-5% Wing aerodynamic drag reduction  Electromagnetic  34% weight reduction Up to 3% energy management  20% lower installation time weight reduction Baggage Door Latch 15% Engine fuel burn  50% Lower installed cost reduction 30%  3x Better joint fatigue life Maintenance  High level of reusabilitycost reduction (5,000 cycles)  Cockpit indicator for proper latch10% Assembly  Provides fuel tight joints closurecost reduction 14
  • 15. Alcoa Delivers Lighter and Stronger Defense Solutions Monolithic Forged Bulkheads for Joint Strike Fighter Proposed Supported byaircraft was enhanced 50k ton press 10%overweight Monolithic forgings save anaverage 400 lbs per jet Provide 15%-20%total system cost savings 15
  • 16. Strong Position in the Dynamic Aerospace MarketAmong the largest providers of aerospace products and solutions producing $3.8B inrevenueProjected vibrant aerospace growth and our innovation leadershipcreate a unique opportunity for Alcoa to capture future profitable growthOur rich aerospace history, industry leading positions and the Alcoa Advantagedifferentiate our business Enabling our customers to meet or exceed goals of current and next- generation aircraft Alcoa. Advancing each generation. 16
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